The Ominous Beat of Looming Budget Blues

Public school officials throughout the state are bracing for impact this week after recent estimates indicate the state’s tax revenue is, once again, on the decline and looking to fall well short of Governor Jerry Brown’s hopes and expectations. Should the predicted $3.7 billion shortfall — which was forecast by the state’s Legislative Analyst Office late last week — come to pass, then more than $1 billion of automatically triggered cuts will likely be levied on public schools throughout the state sometime at the start of 2012, a virtual doomsday scenario for the already heavily cut public education sector.

While the cuts, at least at the moment, are not guaranteed, they are technically built into the state’s adopted $88.5 billion budget. The State Department of Finance must make a similar damning conclusion with its economic forecast due on December 15 for the cuts to be kicked into effect, and even then, there is a chance legislators could spit the bit and try a late-hour maneuver to spread the pain around. In short, if 2011-12 tax revenues don’t equal the predictions of the budget, then two tiers of corresponding cuts will be enforced, which include $1.1 billion for K-12 institutions and $100 million in reductions for the budgets of University of California and California State University schools, likely resulting in tuition hikes and widespread shortenings of the school year.

Here in Santa Barbara, the news was met with cautious hand-wringing by school district officials. A hard-fought negotiation with the district’s teachers union this past spring, which anticipated the likelihood of these late-in-the-game cuts and thusly put in place an agreement for a maximum of 10 furlough days based on the actual severity of the reductions, has the Santa Barbara Unified School District in an enviable position. “We are certainly in a much better spot than districts that don’t have that negotiated yet,” explained School Boardmember Kate Parker this week.

That being said, Parker pointed out that the furlough deal does not kick in until the district is cut to the tune of at least $150 per day in Average Daily Attendance (ADA) funding. So, should the cuts levied on the district fall on the short side of the spectrum, say around $2 million or less, then the trustees would most likely be on the hook to find the necessary dough, no easy task when you consider the severity of their practically annual budgetary blood-letting over the past half-decade. In a press release following the Analyst Office’s forecast last Friday, Superintendent David Cash offered, “The budget is bleak, but we have a plan. While we hope we don’t have to implement the plan, which includes furlough days, we remain hopeful that the State Legislature will decide that children in California matter and we will not be held hostage.”

Both Cash and Parker added that the situation in Sacramento was still too uncertain to react one way or another and that any enduring conclusion most likely won’t be known until next year. As Parker put it, “At this point, we really don’t know what is going to happen … The crystal ball is not even in the same room with us yet.” Besides the still-to-come tax revenue forecast from the State Department of Finance and any potentially related political maneuvers, there is also the unresolved California Supreme Court lawsuit about Redevelopment Agency (RDA) funds.

Should the lawsuit be upheld — a ruling is expected at some point in mid-January — then the school district, which has seen roughly $400 million worth of cumulative funding shortstopped by various RDAs in the past 30-plus years, would stand to be kicked down approximately $1 million in immediate funding among other potentially good fiscal ramifications. Of course, such a court ruling is no sure thing, but as Parker put it, “From a school perspective, it would be absolutely fantastic.”